Insights from the experts in investment fiduciary responsibility.

Expanding the IPS to the rest of your financial and personal life

Posted by Norman M. Boone, MBA, CFP® on April 06, 2015

Permalink |     

For most of us, life happens in one of two ways: A) it happens to us; we don’t control it and often times the life experiences we have are largely accidental results of where we are, who we are with, and events around us.  B) Life happens as we intend; we are purposeful about the things we want in our lives and we do what we can to influence life’s events, so that what we wanted ends up happening.

My wife and I travel frequently.  It’s one of the shared joys in our lives.  We make a point of making sure that we do our two or three trips each year, to familiar and to exotic places.  We’ve built our professional lives in ways that allow us to do that.  We live in places that allow us to be away without concern for security.  We’ve given up pets, because they would interfere with being able to travel as freely.  Because we’ve been purposeful about our travel, it happens.


I’m a huge fan of the work that Dave Yeske and Elissa Buie have done in the area of Policy-based Planning.  In effect, if there are issues in life, developing a policy about how you are going to approach it encourages the behavior that will support and encourage the desired outcome to be realized.  It’s not right for every advisor and not every client will be open to it, but when it fits, it can work really well.

If you’ve ever worked with a client who has won the lottery, or just inherited a lot of money, or just signed a big athletic contract, or enjoyed watching those stock option values go through the roof, however wonderful that may sound, you know it can be a problem for that client.   Family and friends come out of the woodwork asking for gifts or a loan.  Sales people will call with a “great investment idea” or with the hopes of selling them a new car, a new house or more jewelry.  Who do you think gets stuck with the bill when they go out to dinner with their friends?  They often feel guilty about their new wealth and want to be “good guys” and share it.  It can all get used up very quickly.

So what’s the solution?  Having a policy statement about how to handle these kinds of situations.  It has all kinds of benefits.  Developing the policy brings the issue to the forefront and offers the chance for all concerned parties to give it full and reasonable consideration and with that, to develop appropriate guidelines for themselves.  Husband and wife negotiate a common ground way to deal with each of those circumstances, and as a result, they are prepared to deal with them.  They know the agreed upon ground rules, making it easier to follow them.  The policy is, ideally, in writing, so that it can be referred back to when reality challenges intent.  And, it can be changed to something that works better as they live with it.


How else might a policy statement be used in your life?  How about these: a policy for how to handle allowances or education expenses for the kids.  Sharing work chores around the house.  When and where to retire.  Spending and/or saving practices.  Paying down debt.  Charitable gifting.   Insurance issues (amount, kind, etc.).  Spiritual practices.  Education and learning.  Involvement versus family time.  I’m sure you can think of plenty more in your own life and the lives of your clients.

One of the great values you can bring to your clients is to help them with these key issues.  Unresolved, they can fester and harm relationships.  Dealt with openly and with a process, there is almost always a solution that works for everyone.  You can help them identify those issues that are difficult for them, explain the idea of having a policy for it, facilitate the discussion, and document for them the agreements they reach (recording not only the agreement, but how they got there, is really helpful).  Those clients who are willing to allow you to go there will thank you for it, I promise.

View the Recording Now

Previous Post Next Post Return to Blog

Updated weekly

Have an idea for the Fi360 blog?
Send us your question or comment

Subscribe to the Fi360 Blog

Let’s get to work. Connect